Japan banks fuel Nikkei decline

Singapore cuts economic outlook; Taiwan, Korea lower

By

MarikoAndo

TOKYO (CBS.MW) -- A tumble in shares of major Japanese banks led the Nikkei Average sharply lower Monday as investors worried about the business outlook for debt-ridden financial institutions under the government's bad-loan cleanup effort.

Hong Kong's key index rose but Taiwan and South Korean markets retreated from rallies late last week. Singapore stocks fell after the government lowered its economic growth forecast.

The dollar firmed to 121.20 yen during Asian hours, against 120.45 yen in New York late Friday.

In Tokyo, the Nikkei tumbled 157.58 points, or 1.85 percent, to close at 8,346.01 -- barely above the 19-year closing low of 8,309.39, hit on Thursday.

The broader Topix Index also shed 1.5 percent, to 826.77.

Japan's "big four" banks all suffered from heavy selling on fears that the government's reform efforts might weaken the bank's capital base. Speculation is also mounting that some of these debt-ridden banks could be nationalized as the government adopts tighter accounting rules.

UFJ Bank knocked

UFJ Holdings
UFJHF
(8307) sank 8.3 percent to 99,000 yen. The smallest of Japan's big four banks has tumbled more than 45 percent since the start of this month.

Adding to the selling pressure, Standard & Poor's said in the afternoon that it has placed its short-term ratings on UFJ Bank, UFJ Trust Bank and their related entities on credit watch with negative implications due to growing concerns over the group's liquidity risks.

Shares of Mizuho Holdings (8305) plunged 11.2 percent to 119,000 yen on fears over the decline in the value of the mega-bank's stockholdings.

Daiwa Securities (8601) sank 10.2 percent to 425 yen. A former division chief at Daiwa Securities Group and SMBC, allegedly gained 3.5 million yen ($29,000) in February through insider trading, according to local media reports.

NTT DoCoMo
DCM, -0.50%
(9437) fell 4 percent to 218,000 yen. Japan's cell phone giant said late Friday that it has been asked by KPN Mobile to purchase 2.5 billion euros ($2.5 billion) in new shares to be issued by the struggling Dutch mobile phone operator
KPN, -1.91%
DoCoMo, which already owns 15 percent of KPN Mobile, said it will make decision by mid-December.

Internet investor Softbank (9984) closed down 7.9 percent at 830 yen after the company reported a wider group net loss of 55.80 billion yen in the April-September first half year due to a continued up-front spending for its broadband service. Softbank reported a loss of 54.3 billion yen a year earlier.

HSBC rebounds

HSBC Holdings
HBC, -1.21%
(0005) climbed 3.2 percent to HK$89.50. Shares fell 2 percent on Friday after the bank announced plans to buy U.S. consumer finance firm Household International for about $14 billion.

PCCW
PCW
(8) shed 0.7 percent to HK$1.35 following a local media report that the ailing telecom firm might spin off 3,000 employees into a new affiliated unit. Employees in the spun-off company will then be forced to take pay cuts as part of the move, said the Hong Kong Economic Journal.

Blue chip property firm Sun Hung Kai Properties
SUHJY, -1.17%
(0016) dropped 0.9 percent to HK$53. Shares opened slightly higher after the company said before the market opened that it will make a general offer for SmarTone Telecommunications Holdings shares
STTFY, -6.62%
it does not own at HK$8.25 per share, 5.2 percent below the stock's close on Friday.

SmarTone's shares (0315) fell 2.3 percent to HK$8.50.

Taiwan, Seoul lower

Taiwan's Weighted Index retreated from Friday's 11-week high to close down 0.5 percent at 4,790.61.

China Steel shares
CISXF, -7.79%
sagged 2.5 percent to NT$19.60. The Taiwanese firm reportedly is close to sign a deal with Japan's Sumitomo Metal Industries, which may include the long-term supply of steel slabs and a joint venture. Chang Hwa Bank was up 2.4 percent at NT$17.30.

S'pore econ outlook cut

Market sentiment was hurt after the government cut its gross domestic product (GDP) forecast for 2002 to 2 to 2.5 percent, from earlier forecasted range of between 3 percent and 4 percent growth.

The third quarter growth slowed to 10.1 percent year-on-year, compared with a 13.4-percent growth in the second quarter, the Ministry of Trade and Industry said in a statement.

The ministry attributed the lower revision of its annual GDP to an uncertainty in the global economic outlook, especially those in the U.S. "The U.S. economy, which remains the main driver of global growth, is losing momentum," the MTI said.

The government now forecasts a GDP growth of 2 to 5 percent next year.

Shares of Singapore Telecommunications
SGTJY
dropped 3.6 percent to S$1.36 as investors feared a further slowdown in consumer spending. Star Cruises
SSKZF
the world's fourth largest cruise line, was down 3.5 percent at S$0.275.

In Manila, the key PSE Composite tumbled 2.3 percent to close at 1,034.48.

Australia's All Ordinaries Index dipped 0.1 percent to 2,960.80, failing to catch a strong lead from BHP Steel.

Shares of BHP Steel
BHPZF
spun off from BHP Billiton
BHP, -2.66%
in July, shot up 5.8 percent to A$3.12 after the company raised its net profit forecast to A$400 million for the year ending June 2003, up from a previously forecasted A$254 million.

Shares of AMP (AMP) recovered from an intraday low of A$12.11 to close at A$12.48, down 0.2 percent. The country's largest life insurance and fund management group warned that it might write down as much as A$1.2 billion for the year ending Dec. 31, mainly because the firm's ailing U.K. operations show no sign of overcoming their exposure to a hostile stock market. See full story.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.